Welcome to “Making ENERGY STAR Appeal to the
Builder’s Bottom Line”
Hillary Tipton, ICF
Elliot Seibert, EPA
Michelle Yuan, ICF
Part I
Dollars and Sense: Cost-Effective Modeling with ENERGY
STAR Homes
There’s good design…
and poor design…
What are the benefits of an ENEGRY STAR home?
• Consumer awareness and marketing
• Enhanced QA
• Increased incentives, in some cases
Consumer Awareness of ENERGY STAR
• The ENERGY STAR brand is
more recognizable than HERS
and other energy rating
programs
– The ENERGY STAR label is
recognized by 87% of
consumers
– 92% say that it influences
their purchasing decisions
• But what about its marketability
to builders?
Market penetration of HERS Ratings
• Compared to virtually every other subcontractor, Raters are
the lowest cost subcontractor
• But there is still a long way to go for the HERS Index to
become the norm when building a new home on the U.S.
40%
35%
30%
25%
20%
HERS Index
15%
10%
5%
0%
2012
2013
2014
2015
Enhanced QA
• Mandatory measures
– i.e., air sealing
• Additional diagnostic testing
– HVAC Quality Install (QI)
• The HERS Index does not account
for everything: for example, proper
equipment sizing has benefits that
are not reflected in the HERS
score.
ENERGY STAR is more achievable than you think
• Current national average HERS Index is around 63,
while the average HERS Index for a home to meet
ENERGY STAR Version 3.1 ranges from 60 to 70.
• Many HERS-only homes are at or near ENERGY STAR
performance levels.
• We’re going to show you three homes inspired by realworld examples, where we’ll be able to achieve
ENERGY STAR performance level while cutting costs.
Some caveats off the batt:
• Flexibility is key: we offer suggestions and
examples, but you should apply your
experience and organization’s practices
• We are showing screenshots from
REM/Rate because it is widely-used rating
software, but similar cost-saving techniques
can be used in other software.
House 1: “The Alamo”
House Characteristics:
• Built in San Antonio, TX – Climate Zone 2
• 2715 sqft., 4 bedrooms
• 2-story detached, slab-on-grade
• HERS Index = 64
• ENERGY STAR v3.1 Target = 62
Challenges
• Can’t move ducts from unconditioned attic
Let’s make some costs cuts!
Method: Identify Focus Areas
•
•
Use software ENERGY STAR comparison reports
Look for:
– Areas where home under-performs vs. ENERGY STAR
– Areas where home is performing better that might not be costeffective
Comparison Reports
Comparison Reports
Areas of Focus for “The Alamo”
1) Equipment Efficiency
Before: High-End AC + Furnace
• 19 SEER
• 92 AFUE
After: Mid-Range AC + Basic Furnace
• 15 SEER
• 80 AFUE
HERS Score
Change: +8
Target: 62
Cost/Savings
Measure $2,100 savings
Cumulative $2,100
Equipment Efficiency
1) Equipment Efficiency
19 SEER
Original
15 SEER
Recommended
13 SEER
Federal
Minimum
(w/o Quality Install)*
Rated
Performance
Real-World
Performance
Recommended
(with Quality Install)
Original
*Per NIST study at:
https://www.nist.gov/news-events/news/2014/11/underperforming-energy-efficiency-hvac-equipment-suffersdue-poor
2) Whole-House Ventilation
Before: 36 Watt Bath Fan
HERS Score
Change: -1
Target: 62
After: 10 Watt Bath Fan
Cost/Savings
Measure $50 cost
Cumulative $2,050
3) Lighting
Before: Not taking credit for garage/exterior
After: 100% qualifying throughout
• Note that outdoor fixtures on a
photocell also qualify
HERS Score
Change: -1
Target: 62
Cost/Savings
Measure $40 cost
Cumulative $2,010
4) Windows
Before: U-0.53, SHGC-0.35
After: U-0.40, SHGC-0.25
HERS Score
Change: -4
Target: 62
Cost/Savings
Measure $500 cost
Cumulative $1,510
5) Radiant Barrier
Before: No Radiant Barrier
After: Radiant Barrier Installed
HERS Score
Change: -3
Target: 62
Cost/Savings
Measure $1,000 cost
Cumulative $510
6) Water Heater
Before: 0.60 EF Gas Tank
After: 0.67 EF Gas Tank
• ENERGY STAR-qualified water heater
HERS Score
Change: -1
Target: 62
Cost/Savings
Measure $125 cost
Cumulative $385
House 2: “The Chesapeake”
House Characteristics:
• Built in Annapolis, MD – Climate Zone 4
• 2322 sqft., 3 bedrooms
• 3-story townhome, end unit
• HERS Index = 76
• ENERGY STAR v3.1 Target = 67
Challenges:
• 50% more window area than baseline
Let’s see what we can do!
1) Wall Insulation
Before: R-3 Continuous + R-15 Batt
• ENERGY STAR only requires IECC 2009
level as a mandatory minimum (R-13)
After: R-15 Batt + advanced framing
• Meets local 2012 code via UA
alternative path (better ceiling and
windows)
1) Wall Insulation
Standard Framing = 23% framing factor
Advanced Framing = 18% framing factor*
*Per Cost & Savings Estimates at:
https://www.energystar.gov/ia/partners/bldrs_lenders_raters/downloads/EstimatedCostandSavings.pdf
1) Wall Insulation
Before: R-3 Continuous + R-15 Batt
• ENERGY STAR only requires IECC 2009
level as a mandatory minimum (R-13)
After: R-15 Batt + advanced framing
• Meets code via UA alternative path
(better ceiling and windows)
• Framing factor = 19%
HERS Score
Change: +1
Target: 67
Cost/Savings
Measure $3,200
savings
Cumulative $3,200
2) Lighting
Before: Not taking credit for garage/exterior
After: 100% qualifying throughout
• Note that outdoor fixtures on a
photocell also qualify
HERS Score
Change: -1
Target: 67
Cost/Savings
Measure $40 cost
Cumulative $3,160
3) Infiltration
Before: 5 ACH50
• After reviewing historic scores, end-units
consistently performed 30% better
HERS Score
After: 3 ACH50
Change: -3
Target: 67
Cost/Savings
Measure No cost
Cumulative $3,160
4) Whole-House Ventilation
Before: Exhaust-only bath fan
HERS Score
After: Upgrade to ERV
Change: -5
Target: 67
Cost/Savings
Measure $1500 cost
Cumulative $1,660
5) Low-Flow Water Fixtures
Before: No credit taken for water fixtures
HERS Score
Change: -1
Target: 67
After: 2 gpm bath faucets and showers
Cost/Savings
Measure No cost
Cumulative $1,660
House 3: “The Packard”
House Characteristics:
• Built in Detroit, MI – Climate Zone 5
• 2240 sqft., 3 bedrooms
• 1-story detached, conditioned basement
• HERS Index = 66
• ENERGY STAR v3.1 Target = 60
Challenges:
• High infiltration (6 ACH50 vs. 3 in reference home)
Let’s go!
1) Wall Insulation
Before: Flash & Batt
After: R-20 Batt + advanced framing
HERS Score
Change: +1
Target: 60
Cost/Savings
Measure $2,000 savings
Cumulative $2,000
2) Lighting
Before: Not taking credit for garage/exterior
After: 100% qualifying throughout
• Note that outdoor fixtures on a
photocell also qualify
HERS Score
Change: -1
Target: 60
Cost/Savings
Measure $40 cost
Cumulative $1,960
3) Whole-House Ventilation
Before: Exhaust-only bath fan
• 52 CFM per 62.2-2010
• When infiltration is high, check 2013 rate
HERS Score
Change: No change
Target: 60
Cost/Savings
Measure No cost
After: Lowered rate w/ infiltration credit
• 36 CFM per 62.2-2013
Cumulative $1,960
4) Low-Flow Water Fixtures
Before: No credit taken for water fixtures
HERS Score
Change: -1
Target: 60
After: 2 gpm bath faucets and showers
Cost/Savings
Measure No cost
Cumulative $1,960
5) Water Heater
Before: 0.60 EF Gas Tank
After: 0.90 EF Instant Gas Water Heater
HERS Score
Change: -5
Target: 60
Cost/Savings
Measure $1,500 cost
Cumulative $460
Summary: HERS Improvements with Dollar Savings
•
•
•
The Alamo
–
HERS 66  62
–
Savings = $385
The Chesapeake
–
HERS 76  67
–
Savings = $1,660
The Packard
–
HERS 66  60
–
Savings = $460
There are many ways to meet the ENERGY STAR HERS Target, but
some are more cost-effective than others.
To review: How HERS Raters Help Builders
Builders want to save money while meeting customer expectations
to keep up sales:
1. Explain cost-cutting measures. For example, advanced
framing is less expensive AND more comfortable/efficient.
2. Think of cost savings in terms of dollars and cents.
Trimming back on some measures is ok if you end up with a
more cost- effective package.
3. An instantly-recognized, trusted label is a plus. Saving
money on construction materials helps, but don’t forget other
value-adds that come with ENERGY STAR partnership: free
marketing & educational tools, program support, and brand
recognition.
Wrap-Up
• You can send us your energy modeling files for
personalized help modeling cost cuts that meet
ENERGY STAR requirements.
• For any questions that we did not get to, please e-mail
[email protected].
• As a reminder, RESNET will post this presentation.
• THANK YOU for attending!
The Price Premium of ENERGY
STAR Certified® Homes:
A Maryland Analysis
EmPOWER Maryland Act of 2008
• Reduce overall energy consumption 15%
• Utility participation
EmPOWER Maryland (2008-2014)
EmPOWER Maryland Utilities
Maryland ENERGY STAR New Homes Program
BGE Program
Launch 6/2009
SMECO Program
Launch 2/2010
Pepco, Delmarva
Power, and
Potomac Edison
Launch 2012
• 2008:
– ENERGY STAR New Homes comprised ≈ 6% of the
Maryland new homes market
– Market penetration was 42nd in the nation
• Today:
– ENERGY STAR New Homes now make up ≈ 40% of
new homes built in Maryland in past 3 yrs
– Now 2nd in nation for market penetration
Maryland ENERGY STAR New Homes Program Results
Program Lifetime:
– ≈ 21,000 ENERGY STAR New Homes
– $27 million in incentives
– 30,000+ MWh saved
Evolution of Program
• Program Launch:
– Tiered incentive structure based on HERS Scores
– Introduced 90% high efficiency lighting minimum in 2014
– Simplified tiered structure in 2015
– Shift away from HERS Scores to Home Type in 2015
2009-2011
ES v 2
2012-2014
ES v 3 with 2012 Code
2015
HERS 85-81
$400
HERS 75-71
$1000
HERS 70-66
$1000
HERS 80-76
$800
HERS 70-66
$1300
HERS 65-61
$1300
HERS 75Below $1000
HERS 65-61
$1600
HERS 60 - Below
$1600
After April 1, 2015
ES v 3.1
Multifamily
$400
2-on-2 Condo
$550
Townhome
$750
Single Family
$1250
Program Benefits
• Marketing
support
• Website listing
• Sales training
• Technical training
• QA/QC
• Research:
Baseline and price
premium studies
Price Premium Study
• Collaboration between the Maryland utilities to quantify
the impact of ENERGY STAR Certification on home prices
• Evaluated Maryland home
prices between 2010-2016
• Included sample of 2,723
ENERGY STAR homes and
13,065 non-certified homes
• Regression model used to
isolate impact of ENERGY STAR
Certification on home value
(hedonic regression model)
Why did we conduct this study?
• Utility Perspective
– First steps to capture non-energy benefits
• Builder and Rater Perspective
– Concrete answer of what is ENERGY STAR
Certified New Home worth
• Homeowner Perspective
– Non-energy benefits are at times more
important in driving energy efficiency
program for end consumers
Methodology
Characteristics Based On:
• Impact on Home Value
• Availability of Information
• Feasibility of Analysis
Some of the Home Characteristics Include:
•
•
•
•
•
•
Location
Home Type
Date of Sale
Sale Price
Number of Levels
Year Built
• New Construction
•
• Number Bedrooms,
Bathrooms, Fireplaces •
• Lot Size Square Footage •
• Living Area Square
Footage
Basement, Attic,
Swimming Pool
Parking
Water Oriented, View,
or Access
Methodology
5 Maryland Utilities
MD Homes Data from
MLS/RBI
• 366,542 homes
• Homes sold between
1/1/2010-3/1/2016
Processing
• New
construction
• Built after 2008
and sold after
2010
• 18,566 homes
“ES Report” and MLS Data
Standardized and Matched to
Identify ES Homes in MLS Data
• Exact & App. String Match
• Remove duplicates
• Remove homes with missing
Information
Sample
2,723
ES homes
MD “ES Report” Data
• 17,860 homes
• 1/1/2010-3/1/2016
13,065
non-ES homes
Exploring the Data
54% single family homes
43% townhomes
Most homes (99.5%) were sold in
standard sales
Exploratory Data Analysis and Missing Data
Top 10 counties with highest number of new
homes accounted for 92.2% of the sample
What’s in the data and what does that mean?
Large percentage of data missing for total
living area (55%) and lot size (11%)
ENERGY STAR Homes and non-ENERGY STAR
Homes included in the data were
comparable
However, ENERGY STAR Homes sold faster
than non-ENERGY STAR Homes!
Data Analysis and Model Selection
10 Models with Different Dependent Variables
5-10 variations per
model
Final Model: 2G2
•
•
•
•
Dependent Variable: Log of sale price
Primary Independent Variable: ENERGY STAR Certification
Model fitted separately to each year
Include 2,811 parameters
• Parameters only created for terms that are statistically
significant at the 5% significance level for 2+ out of 5 years
Results
Model 2G2
Year
Estimate
StdErr
tValue
(T-statistic)
Probt
(P-Value)
2011
0.0575
0.0647
0.8892
0.3740
2012
0.0521
0.0166
3.1322
0.0018
2013
0.0327
0.0092
3.5451
0.0004
2014
0.0271
0.0079
3.4375
0.0006
2015
0.0210
0.0078
2.6945
0.0071
2016
0.0351
0.0364
0.9649
0.3359
• Model is a good fit and there is statistically
significant price premium for ENERGY STAR
New Homes for years 2012-2015 at 1% level
• Not significant for 2011 and 2016 due to
insufficient data
• Price premium of 2.1-5.2% for 2012-2015
What this means:
Year
Price Premium
2012
$24,953
2013
$15,645
2014
$12,978
2015
$10,077
• $10,077-$24,953 price premium is attributed to ENERGY STAR New
Homes certification per home
• The Maryland ENERGY STAR New Homes Program has delivered
21,000 homes since 2010: $211,617,000 - $524,013,000 additional
value generated for builders
• Study is first step, imagine quantifying other economic/market
impact related to $211-524 million dollars (job growth, regional
impact, etc)
Reception